External influences

Extracts from this document...

Introduction

NAME: Lashana Ricketts FORM: 10LE TEACHER: Mrs. Barton ECONOMIC CONDITIONS 1) Why do UK businesses need a stable economy? The economy is a delicate balance. The factors that are depending on a stable economy are: * The level of inflation- i.e. the level of price rises each year * The level of interest rate- how much it cost to borrow money * The strength of the �- which affects the exchange rate- the cost of trading with overseas countries. The UK businesses need a stable economy because if the economy were not stable, businesses would loose out. E.G. if interest rates were high businesses would not be able to borrow money for them to develop their businesses. So a stable economy ensures that businesses in the UK will be able to expand their companies. 2) Explain the current interest rate? Why is a high interest rate bad for your businesses? The interest rate is measured as a percentage and is the cost of borrowing money. ...read more.

Middle

If there is a high inflation the profit of both The Body Shop and GUCCI would have a decrease. If inflation is high the businesses would be affected in numerous ways. Some of these ways are: * Future money values become very uncertain * Planning decision becomes very uncertain * Price list keeps changing * Interest rates would be high so borrowing would be expensive Examples of what could be affected with high rates of inflation: The Body Shop and GUCCI * The making of the product would become very expensive because it would cost a lot more to buy the machineries * The ingredient would also become expensive and with expensive ingredient that will make the business loose money. ENVIRONMENTAL CONSTRAINTS Environmental laws for your businesses Waste duty of care The duty of care is a law says that 'you must take all reasonable steps to keep waste safe. If you give waste to someone else, you must be sure they are authorised to take it and can transport, recycle or dispose of it safely'. ...read more.

Conclusion

The qualities of both businesses are really high. They have to be high because of the price range of their products. With a high price rate the product is expected to be best in quality by everyone. Because of the success of both these companies their products aren't available to everyone. If you have a lot of money then you are expected to have at least one of each of these brands. The companies are both top of the line when it comes to clothes. If their products were available to everyone then all those celebrities would not be caught in them. Celebrities are the main targets for both of these companies. If celebrities are in these designers then people will try their best to save so that they too can buy a little luxury. As I said before I haven't found any differences but the one thing that I think will affect both GUCCI and Prada customers are the prices. I think that if both companies would at least make some products, which are less expensive, they would attract even more customers. It is known that some > NET--> http://www.defra.gov.uk/environment/waste/management/doc/ (15/12/04) ...read more.

Related GCSE Economy & Economics essays

Developed countries tend to have an even sex and age structure while less developed ones have over half their population aged under 16. An ageing population occurs when the average age per person is rising. Population Structure by Area There is an uneven spread of population about the country because: * Some areas are remote, hilly or uninhabitable.

The rapidly growth in economic and disposal income in Asia Pacific region has brought a great opportunity to boost the intra-Asia travel demand. Several Asian countries have improved the destination image and destination marketing activities. Moreover, most of the Asia Pacific countries are removing the trade barriers which may encourage

These initiatives include collaborating with food processors in purchasing as well as manufacturing private label goods, and engineering strategic relationships with branded goods companies aimed at increasing sales and reducing distribution costs (benefit shared by both parties). This is already beginning to happen.

If both of measures inefficient, the only way of influence the exchange rate is to change the exchange rate. If countries with surpluses move their value of exchange rates higher, it will be revalue, if countries with deficit decrease their value of exchange rate, it will be devaluation.

* Customers usually have more money to spend on electronic goods, because they are paying less for their mortgages and other essential items. * Customers may be prepared to spend more to buy better quality goods and may use their credit card to do that because the interest charged would be less.

On the other hand Corus are also suffering from negative changes, because they are experiencing falling sales as consumers increase savings moreover Corus also have to reduce production to match their sales. Changes in the economy Price increases (inflation) Price increase in products has a number of possible causes 1 Employees may negotiate higher wages.

and Tajikistan (1500% in 1995). The Business Cycle is a useful way of showing a country's economic 'ups and downs'. This measures the changes in the Gross National Product (GNP - Refer Appendix 1). It reflects the general trends of Injection (addition) or Withdrawals of capital into and from the economy.

He is more like a unique business in his local area and so local people are most of his customers and will remain his customers. If Errol is having difficulty for winning new customers or retaining its existing customers he may lower his prices.